New report urges ongoing government assistance to save local media

Media professionals studying the decline of local media organizations are recommending new ways to keep small publications alive in an evolving media landscape.

Source: University of Saskatchewan

Author: Noah Jarvis

Media professionals studying the decline of local media organizations are recommending new ways to keep small publications alive in an evolving media landscape.

A new report from the Public Policy Forum titled “The Lost Estate” documents the decline of local news across Canada as the internet became an increasingly important method for news consumption.

Citing a project from Toronto Metropolitan University professor April Lindgren, the report finds that since 2008, 526 local media outlets have closed, and while 402 new outlets opened, only 274 of those survived.

The report says local media outlets are on the decline because advertising revenue has fallen dramatically in recent decades. The report claims that from 2018 to 2022, ad revenues for local newspapers fell by 44 per cent while ad revenue declined 33 per cent for local radio stations.

The authors make a series of policy recommendations for all levels of government to help the local news industry.

The report calls on the federal government to reform the Local Journalism Initiative – a program that currently issues short-term grants to community media to help pay for the wages of their reporters. It is recommended that the initiative move from single-year to multi-year grants and to help newsrooms finance training for their new journalists.

The Canadian Journalism Labour Tax Credit also faced scrutiny for giving certain media organizations millions of dollars just to see many of them cut the volume of their content and staff. The current tax credit system pays media organizations 35 per cent of the cost of their newsroom staff.

The report says the journalism tax credit should be tied to how much its recipients retain staff and grow their newsrooms.

|The report also recommends advertisers receive a tax credit for spending their ad money with locally owned media. The federal government should also spend its advertising dollars on local news, the report states.

While the Trudeau government implemented programs like the Local Journalism Initiative and the labour tax credit, critics argue that direct funding of journalistic organizations has contributed to a decline of trust in the media.

In a comment to True North, former vice-chair of the Canadian Radio and Telecommunications Commission Peter Menzies made such an argument, claiming that such programs creates a conflict of interest.

“Direct funding of journalism organizations by the government undermines public faith in journalism as it is seen as an entirely inappropriate conflict of interest,” said Menzies.

“It is also inherently counterproductive to maintaining an environment within which Canadians can organize their lives around a shared set of trusted facts.”

Menzies specifically criticized the Local Journalism Initiative for favouring established organizations over new entrants into the market.

“Also, by favouring incumbent products funds like the LJI also make it more difficult for new entrants to launch with innovative business models more suited to the technological reality of the 21st century,” said Menzies.

Menzies says if governments would like to help media organizations survive, they ought to subsidize the consumption of news instead of its production.

“Furthermore, funds such as LJI only involve funding the production of content and assume that achieves an outcome. If the goal is truly to ensure Canadians are informed by a shared set of trusted facts, it is their consumption of news that should be subsidized through tax-deductible subscriptions and donations,” said Menzies.

“Enhanced production subsidies only further embed an increasingly inappropriate partnership between the media and the politically powerful, undermine trust and diminish faith in the existence of freedom of the press, an element fundamental to a healthy democracy.”